Riding a wave of new tax revenue, California Gov. Jerry Brown on Thursday proposed a state spending plan that eliminates the deficit and provides $6.3 billion more in spending than the previous year.
The revenue has wiped away a budget deficit that stood at $25 billion when Brown took office two years ago and has created a slight surplus.
Brown proposed a $97.6 billion general fund for the 2013-14 fiscal year, an increase of 7 percent from the current year. The additional revenue will help him pour more money into public schools and universities.
California's spending plan for the coming fiscal year will rise by 7 percent, a powerful indication that the state that came to symbolize fiscal mismanagement during the heart of the recession is emerging into brighter days.
"California today is poised to achieve something that has eluded us for more than a decade -- a budget that lives within its means, now and for many years to come," Brown told reporters.
His budget includes a surplus of $850 million.
A rebounding economy coupled with new revenue from the higher sales and income taxes voters approved last November have put the nation's most populous state on a healthier financial trajectory, as it begins to turn the corner on an era of deep budget shortfalls and spending cuts to core state programs.